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Is now the time to sell all your gold? Stanley Druckenmiller thinks so.

Discussion in 'PM Trading/Stocks/Technical Analysis' started by JayDubya, Nov 10, 2016.



  1. JayDubya

    JayDubya Gold Member Gold Chaser

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    Druckenmiller: I sold all my gold

    http://seekingalpha.com/news/3223444-druckenmiller-sold-gold?uprof=45&dr=1#email_link

    Nov. 10, 2016 11:06 AM ET|By: SA Eli Hoffmann, SA News Editor
    Speaking to CNBC this morning, fund manager Stanley Druckenmiller - who had been pessimistic about the U.S. economy, said that he is now "quite, quite optimistic" on the U.S. economy following the election of President-elect Donald Trump. "It's as hopeful as I've been in a long time."

    "I sold all my gold on the night of the election." Why? “All the reasons I owned it for the last couple of years seem to be ending", namely, expectations that inflation is now set to spike, forcing money out of safe assets - like gold and Treasurys - and into the dollar.

    Druckenmiller said he now has a “large bet on economic growth. I’m short bonds, Bunds, Italian bonds, U.S. bonds.” The trades reflect his expectation of higher deficits and stronger growth leading to another surge in debt.

    Druck said he is “hopeful” on the Trump administration and political climate. “I would not be surprised if we’re looking at the absolute peak of divisiveness.”

    ETFs: GLD, TBT, TLT, IAU, TIP, PHYS, TMV, SGOL, IEF, SHY, UGL, DGP, TBF, GTU, UGLD, GLL, EDV, TMF, DZZ, PST, TTT, OUNZ, VTIP, ZROZ, DGL, RINF, DGZ, DGLD, MBB, VGLT, TLH, IEI, BKT, SCHP, BIL, TYO, UBT, IPE, UST, DLBS, PLW, DTYS, TLO, VGSH, VMBS, LTPZ, SHV, GNMA, VGIT, STPP, STPZ, TIPZ, GOVT, SCHO, STIP, UBG, FLAT, TBX, SCHR, FTT, ITE, GSY, TYD, DTYL, EGF, VUSTX, DLBL, MBG, TYBS, SST, DTUS, TPS, TUZ, DTUL, TDTT, AGZ, DFVL, TIPX, TAPR, TBZ, TDTF, DFVS, USFR, TYNS, SIPE, TFLO, QGLDX, RISE, FIBR, GBIL, HYDD
     
  2. the_shootist

    the_shootist I self identify as a black '69 Camaro Gold Chaser Site Supporter

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    I didn't!!!
     
  3. JayDubya

    JayDubya Gold Member Gold Chaser

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    I never had any to begin with. I just come here to hang out with you folks 'cause you're so damn fun.
     
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  4. Irons

    Irons Deep Sixed Site Supporter Mother Lode

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    Gold? Sell? WTF? . :dog:
     
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  5. Ebie

    Ebie Midas Member Midas Member

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    So, buy Italian bonds instead?
     
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  6. southfork

    southfork Mother Lode Found Mother Lode

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    Nothing has changed , 20t in debt, 100t plus unfunded liablitites , only question is how bad it gets, Dems will obstruct as much as they can, Schummer already got caught saying it, they will work against trump. World is a bubble
     
  7. louky

    louky Silver Member Silver Miner

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    Nothing changed? I disagree.

    Savior Trump.

    All time highs coming stock.

    Free, easy king $ profits for all (except for metals investors of course).

    I posted soros selling in august. That was the fire alarm. The question is, are the druck's sources as good as his?

    :winks2:
     
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  8. glockngold

    glockngold Gold Member Gold Chaser

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    Ok dude that can't deliver, lead on...............
     
  9. Ebie

    Ebie Midas Member Midas Member

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    Wall street was funding HRC 99:1 over DT.
    But now they like him?
    Very interesting...

     
  10. andial

    andial Sir Midas Member Site Supporter

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    I would trade gold for silver right now! There is a base metal rally brewing silver will get some (alot) of that action but i fear a debonaire metal like gold will remain quiet.
     
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  11. louky

    louky Silver Member Silver Miner

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    I'm over my head in silver. Stacked to the ceiling like beer cans.
     
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  12. JayDubya

    JayDubya Gold Member Gold Chaser

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    have you seen what copper is doing, andial?
     
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  13. louky

    louky Silver Member Silver Miner

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    Broke out of the long term down trend line from 2011. Same as gold, which failed miserably on the retest.

    At this point, still possibly a false breakout with copper
     
    Last edited: Nov 10, 2016
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  14. louky

    louky Silver Member Silver Miner

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    I have a post in the nickels thread showing copper may have bottomed a few weeks ago. Though I warned it could still make a lower low in the next 6 months. So far it's behaving as expected. Lets see what happens on the retest.
     
    Last edited: Nov 10, 2016
  15. andial

    andial Sir Midas Member Site Supporter

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    Yes doing very well all base metals are rallying the worse the metal the bigger the rally, i'm guessing but i bet ore is doing best.
     
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  16. Mr Paradise

    Mr Paradise Midas Member Midas Member

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    I'm no longer ashamed to tell people I have a basement full of pre 82 pennies.
     
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  17. louky

    louky Silver Member Silver Miner

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    [​IMG]


    [​IMG]
     
    Last edited: Nov 10, 2016
  18. Flight2gold

    Flight2gold Silver Member Silver Miner Site Supporter ++

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    Inflation is going up. Sorry.

    [​IMG]
     
  19. JayDubya

    JayDubya Gold Member Gold Chaser

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    Druckenmiller Is Wrong About Trump And Gold

    http://seekingalpha.com/article/402...6cf81628f3de4f8f1a4016ebc35fc17&uprof=45&dr=1

    Summary
    Stanley Druckenmiller has disclosed that he sold all his gold on Election Night. He is optimistic on U.S. economic growth under Trump.

    Wow. I strongly believe Druckenmiller is dead wrong about Trump and gold. Buy gold now, don't sell it.

    Trump will lead to two things: inflation and geopolitical chaos. Both are very bullish for gold.

    I prefer long gold over Druckenmiller's short government bonds, because gold will rise on inflationary growth, stagflation, or safe haven demand in any kind of crisis.

    Investors must realistically take into account the risk that half the country and much of the world hates and fears Trump. This is a great geopolitical risk to the economy.

    I was quite surprised to read this morning that Stanley Druckenmiller has disclosed that he sold all his gold on Election Night. Druckenmiller now says that he is "quite, quite optimistic" on the U.S. economy, that "It's as hopeful as I've been in a long time," and that he is "hopeful" on the Trump administration and political climate: "I would not be surprised if we're looking at the absolute peak of divisiveness."

    Wow. I have a lot of respect for Stanley Druckenmiller and his legendary history of investing success, but I strongly believe he is dead wrong this time, and I happily take the opposite side of his bet.

    It's very simple. Trump's presidency is very likely to lead to two things: economic inflation and political chaos. Both of those things are very bullish for gold (SPDR Gold Shares (NYSEARCA:GLD), Sprott Physical Gold Trust (NYSEARCA:PHYS)).

    Financial markets are already betting on the inflation. All the moves in all sectors in the wake of Trump's election reflect rising inflation expectations due to anticipated infrastructure spending and fiscal stimulus. I wrote about this in my article, "Gold Miners Are A Clear Buy With Trump As President," pointing out that metals, miners, basic materials, industrials, and energy stocks are racking up big gains since Trump's election.

    In fact, Druckenmiller's new big bet, shorting government bonds in the U.S., Germany, and Italy as a "large bet on economic growth", is also a large bet on inflation. But inflationary economic growth will be bearish for government bonds and bullish for gold at the same time.

    The last time Treasury bond prices fell sharply for an extended period of time was the 1970s. We all know what happened to the gold price then. In fact, there is no significant period in history when Treasury bond prices and the gold price have fallen at the same time. The only period when Treasuries fell and the gold price didn't rise was from World War II until the 1970s, and that was the period when the U.S. government banned the private ownership and trading of gold.

    That was also a period of long-term peaceful U.S. economic growth. It came after a long turbulent period of a world war, a depression, and another world war. Druckenmiller appears to believe that we are about to have another Post-War Boom kind of period under Trump. Back to the 1950s! Sorry, I cannot believe that this is what will happen.

    So many things can go wrong with Druckenmiller's bet on economic growth under Trump. Setting aside anyone's personal political opinions, one has to keep in mind that half the country and much of the world hate and fear Trump. You may love him, you may hate him, you may not care either way, but your investments will care about the fact that Trump is one of the most divisive political figures in U.S. history. To say that right now is "the absolute peak of divisiveness", and that American politics will become less divisive going forward under Trump - well, that is quite a statement. I don't advise you to invest based on it.

    Just in the last week before the election, Trump had to be hustled off a stage by the Secret Service due to a perceived threat in the crowd. This reaction apparently turned out to be overblown, but it is an indication of the kind of controversial, polarizing figure that Trump represents. Druckenmiller seems to be making a big bet, among other things, on the life and health of Trump in office. I'm afraid this is a risky bet. I don't wish anyone personal ill tidings, but as a prudent investor you have to be coldly realistic about the geopolitical risks that exist in the world, and the hatred of Trump is one of those risks. Speaking frankly, does Druckenmiller really have confidence in peaceful prosperous economic growth under a Pence Administration as well as under a Trump Administration? A prudent investor needs to be realistic and think about such things.


    Look, Druckenmiller may well still make a lot of money on his short bet on government bonds. They will sell off on rising inflation and rising interest rates, whether that accompanies economic growth or stagflation.

    But I will much rather place my bet on a rising gold price. This investment will work out well under inflationary growth, stagflation, or safe haven demand in any kind of crisis. Have we already forgotten that just yesterday we were all worried about the risk of another global financial meltdown and massive global economic depression, because the problems of 2008 haven't been solved, they've just been literally papered over with debt and ballooning central bank balance sheets?

    Yes, it is conceivable that Trump could spend his way out of $19 trillion of debt. But it is also conceivable that the debt pyramid could collapse before Trump or anyone else is able to spend his way out. The best way to be financially prepared for either of these scenarios is to own gold.

    For Druckenmiller to switch his financial bet from long gold to short government bonds, that's a personal tactical investment decision on his part. It may or may not work out for him. But for the rest of us, it is risky to listen to him and sell gold, or not buy gold, because of what he says. He may do just fine with this trade, but you or I may not. I strongly believe the right move for most people right now is to buy gold, not sell it.

    Disclosure: I am/we are long PHYS.

    I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
     

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